Mobile Commerce

Are Sound Waves The Future Of Mobile Payments?

When Soundpays CEO Peter Misek thinks of the term "payments innovation," three concepts come to mind that seem to be universally accepted as to what's next in payments.

Security. Scalability. Ubiquity.

But how Misek's company — co-founded by CTO Jason Squire — innovates payments isn't universally as known. Though if their vision takes off, it may be the next big thing in the mobile payments market. At least if merchants, consumers and financial institutions can buy into paying using sound waves.

No small feat.

"I wanted an idea where we could have ubiquity, and NFC can't be ubiquitous. Low-powered Bluetooth can't be ubiquitous. So, we needed a technology that was completely backward-compatible and worked with all existing infrastructure," Misek said in an interview with PYMNTS.

So how did that inspiration come about? Well, about a year ago — and after about 20 years working on Wall Street and seeing "a lot of friction in different spots" and how mobile and payments were merging — Misek said that Soundpays (before it was officially Soundpays) had a technological breakthrough that was a game changer.

[bctt tweet="I wanted an idea where we could have ubiquity, and NFC can't be ubiquitous."]

Which, he admits, came with a little luck. The breakthrough has a lot of potential to power mobile payments faster and in ways never thought of before, Misek said. Power like half-second transaction speeds that can process up to 59,000 transactions per second.

Soundpays, a Toronto-based mobile payments startup, which has a claim to fame as being the "first and only mobile wallet solution to enable secure transactions with nothing more than regular sound waves in noisy environments," also reduces one friction point some major mobile pay players like Apple Pay haven't seemed to overcome yet.

The fact that merchants don't have to add any new hardware.

"We can white label, so we can power anybody's wallet, anybody's app and allow them instantaneous access to video, to radio, to TV. And our niche is we can truly be working with anything. No other payment solution works on video, works on radio, works on TV, works on display ads, works online, works in-store. It just doesn't exist — whereas we can enable all of that. There's nobody that we found yet that can do all of that in one go."

[pullquote] Everybody's interested in replacing their wallet with their phone, but there's no truly ubiquitous way to do that until now. [/pullquote]

Yes, that means if a consumer is sitting on his or her couch and sees a commercial for a product they want, the inaudible sound waves are sent to the Soundpays mobile wallet and allow that consumer to make a purchase. They can also make donations and book appointments without moving off the couch. Or, do so on the go while spotting a digital video sign.

By using its proprietary technology, Soundpays enables purchases to be made after the sound is transmitted to the Soundpays mobile wallet. Those purchases are then taken from the user's debit/credit account.

"We've created an omnichannel solution that allows mobile payments in-store, online, over TV, through digital displays, in stadiums, over the radio, in movie theaters. Basically, anywhere there's a speaker, we can create a commerce experience," Squire said. 

"We can make purchases instantaneous almost, reduce all that friction, enable impulse purchasing, reduce cart abandonment online, take ad spending and convert it into actual purchases."

[bctt tweet="Anywhere there's a speaker, we can create a commerce experience."]

And because Soundpays works with anyone's mobile wallet, it has the ability to bring in more users quicker and enable more merchants to benefit from the Soundpays payments technology. Squire also explained how Soundpays is a more secure way to pay, particularly because the Soundpays app never stores payment information. 

"For security you need directional technology, which means that the only transaction that can travel through the air is actually the basket of goods. If a hacker was to intercept our signal and decode it and trigger APIs, all they would see is the product that's for sale," Squire explained. "They wouldn't see the purchaser or the purchaser's financial information. That's all transacted securely. It's a one-way transaction, and we don't actually store personal information on the mobile phone. That's all securely in the cloud."

While Soundpays was just founded in April 2015 — after two years of being in incubation — it's ready to hit the market with merchant partners, white-label partners and financial institutions that want to leverage Soundpays' technology on their existing mobile app. Or, Soundpays is also looking to work with companies who want to use their mobile app in retail, online and video experiences.

"Everybody's interested in replacing their wallet with their phone, but there's no truly ubiquitous way to do that until now. There's mobile wallets that will work in store with NFC, there's different implementations online, but none that crosses a whole spectrum of purchase opportunities," Squire said. "The whole idea of transferring your financial data into a mobile wallet and not carrying around another wallet is to not have to carry around both. So, we believe we created a solution that will allow you to just use your phone for mobile payments. And you won't need to carry around your wallet."



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.